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Truth 25There are really only two kinds of negotiations

There are two basic kinds of negotiations: fixed-sum and variable-sum.

In fixed-sum negotiations, the parties' interests are directly opposed, such that however much one gains, the other loses, and vice versa. Suppose you and I are negotiating over price. I'm the buyer and you're the seller. My reservation point is $80, but I'm obviously not going to tell you that. Your reservation point is $60, but you would rather be hit by lightning than volunteer that.

I start the negotiation by offering low ("I'll pay you $25"), to which you counter high ("Nothing less than $120!"), and each of us continues trying to get a better deal for ourselves. In the end, we are dividing a fixed sum of resources. ...

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